September, 2006

OF GRASSHOPPERS, ANTS, AND DOMESTIC TRANQUILITYby LARRY

In the classic ant and grasshopper fable, attributed to Aesop, the compulsive, stodgy ant works hard and saves or stores a big stash of food for the winter, while his friend, the grasshopper, fritters away the summer doing whatever he or she feels like, setting aside little or nothing for the coming lean times. Inevitably, harsher seasons arrive, the grasshopper is in dire straights, and the ant must either bail out his spendthrift pal or leave him/her to a more natural fate.

Many couples (or other pairings, as between parents and their children) find that money issues are among their most difficult, leading to disagreement or even breakup. With several options and two people, each not always consistent, there are many potential financial style combinations.

For instance, there are those who are primarily spenders, savers, investors, and generous givers. Thus, in a typical pairing, these are the simplest sets of potential arrangements:

he a spender with her a spender

he a spender with her a saver

he a spender with her an investor

he a spender with her a giver

he a saver with her a spender

he a saver with her a saver

he a saver with her an investor

he a saver with her a giver

he an investor with her a spender

he an investor with her a saver

he an investor with her an investor

he an investor with her a giver

he a giver with her a spender

he a giver with her a saver

he a giver with her an investor

he a giver with her a giver

What with folks' styles changing over time or in new circumstances or with some having more than one approach (saver/investor, for instance, or spender/giver), or the added styles of risk-taker vs. conservative, "security-firsters", workaholics (folks who slave their proverbial butts off), vs. those who are comparative slackers, the array of possible combinations in any relationship can be mind boggling. Unfortunately, when styles differ, we are prone to think ours is best or at least better and that one's partner's is either worse or worst. Over a lifetime together, the combined vocation hours and their earnings plus the sum of conceivable savings, amounts given away or spent, indebtedness, or appreciated investments can assume gigantic proportions, literally millions of dollars. Under the circumstances, it is all too easy to get one's ego involved and to take rather absolute, self-righteous positions. Not a natural prescription for equanimity.

Yet, careful decisions before getting together with another, about whether a partner's typical style of handling earnings and personal finances are compatible with or complementary to one's own, are hardly the norm. Rather, almost willy-nilly or by chance, we end up with someone whose attractions for us often have little to do with work or money management profiles. Thus, frequently we learn only later if our mates share a style that is more or less neutral to, highly accommodating of, or completely antagonistic to our own.

And let us not be judgmental here. Notwithstanding the apparent moral of the ant vs. grasshopper tale, it would be far too easy to assume only the savers, investors, or workaholics (basically, the ants) have the moral or practical high ground. But life is not so simple. There is arguably much to be said for the generous giver, for example. Among other things, they may be our nation's cadre of volunteers, the sponsors of our charitable foundations, the supporters of friends and family in times of need, those who will put themselves in the background while doing everything to assure children and others get good starts (or have second chances), the ones who take a bowl of homemade soup or a fresh pie to people who are ill, etc.

Where would our economy or we ourselves be without the spenders among us!? And just counting my own relatives, particularly if I look out two or three generations, I can point to instances of folks who would seem to have had spender profiles who nonetheless wound up being better providers or benefactors than their more miserly, methodical friends and kin.

Those who are typically the "slackers" may have leisure in which to come up with innovations, creative expressions, or other contributions that enhance both their own lives and those of others.

So, it is not at all a matter of one person being good and another bad, or even of one approach being correct and another incorrect, but simply of divergent styles. If we happen to have as different approaches as those of the storied ant and grasshopper, though, it would not take great insight to see that relationship troubles could be brewing.

The BBC has a concise web page that offers several questions to help partners assess if their money styles are compatible. It might be fun to check it out.

If you find, or already know, that your styles are completely simpatico, well and good!

But if the responses are different enough to point to rather opposing monetary viewpoints, all is far from lost. Often sincere, respectful, two-way communication can do wonders for smoothing out the rough spots in a couple's financial planning road. One may also draw up a household budget and develop a formal financial agreement between the two of you. Though owning up to and seriously discussing your differences have their place, the give and take of compromise, so long as neither person feels afterward like she or he has been taken advantage of, can lead to both of you receiving far more from the arrangement than fighting has to offer.

Third party consultations may be appropriate as well. Frequently, seeing a reasonably priced financial advisor in whom you both have confidence can be a way of gaining insight and perspective that allows for better and longer lasting solutions than you may have arrived at on your own. There may also be a place for couples counseling, if differences over money management issues feel otherwise intractable and are interfering with the rest of your relationship.

Resolving financial differences can be one way to give a boost to a dyad. Often the relief a couple feels when both realize monetary solutions are possible, even that what the partner is suggesting is not as outrageous as one thought before working things out, goes far toward assuring that the new way of handling work, spending, saving, giving, and related issues between them is sustained. Frequently too, the new arrangement offers enough felt benefit to each member of a domestic bond that the financial agreement is a marked improvement over the way things were done before. Each person wins.

DISCLAIMER

Larry is not a professional. Don't take him seriously!

Actually, the investment article provided here is for general information only and should not be considered as professional advice, a solicitation to buy or sell any security, or the Word of God. Investors are encouraged to do their own research while considering their personal goals and circumstances, or consult their own professional financial advisors, before making investment decisions. Neither Larry nor LARVALBUG will be liable for any losses sustained by any visitor to this site.

(Disclosure statement: Larry and Val have holdings in some of the suggested assets but do not "make a market" in any of them and do not derive any direct benefit from recommending them, except perhaps for a bit of smug self-satisfaction.)